NUWC reportedly stripped of power to grant contracts
Published April 26, 2011
By Matt Sheley/Daily News staff
NEWPORT - Federal and state officials are remaining tightlipped, but the buzz in the local defense contracting industry is that Naval Undersea Warfare Center Newport has lost its contracting authority, at least temporarily, in the wake of a multimillion-dollar bribery and kickback scheme.
NUWC Newport spokesman David Sanders on Monday referred questions from The Daily News to the Navy's Naval Sea Systems Command office in Washington, D.C., where spokeswoman Patricia Dolan declined comment.
"I know you're looking for a statement from us on something about the NUWC contracting authority being suspended," Dolan said in a voicemail message she left for a reporter. "I don't have a statement for you today. (I) probably won't have something until (Tuesday) or Wednesday on that."
This morning, Keith W. Stokes, executive director of the state Economic Development Corp., said his staff is investigating reports that NUWC's contracting authority has been suspended. The defense industry is crucial to the regional economy and to the welfare of the nation, he said.
"Even if you take the economic portion of the equation off the table, these contracts have great military value and are part of our larger warfaring ability," Stokes said. "I don't think we should be restricting that too deeply."
The alleged suspension is the latest in a series of developments involving the local defense contracting industry. It has been in the spotlight since a federal investigation resulted in the February arrests of Anjan Dutta-Gupta, owner and president of the former Advanced Solutions for Tomorrow firm in Middletown, and Ralph Mariano, a civilian program manager and senior systems engineer with the Navy's Naval Sea Systems Command.
Dutta-Gupta, 58, of Roswell, Ga., agreed last week in U.S. District Court in Providence to plead guilty to a charge of paying bribes to Mariano, 52, of Arlington, Va., to guarantee payment and additional funding to ASFT, his now-closed defense firm, for existing Navy contracts. Dutta-Gupta is scheduled to appear in court on Thursday for a change-of-plea hearing, when he also is expected to be sentenced.
From 1996 through January this year, at least $8 million was paid by ASFT to Mariano, his family members and to his longtime girlfriend Mary O'Rourke, who was a senior vice president and director of strategic planning at ASFT, according to court documents. In addition, at least $1.2 million was funneled back to SIC, a corporation owned by Dutta-Gupta.
"What happened at this company, what they did, was an awful situation that came completely out of left field," Stokes said this morning. "In no way was it indicative of the industry as a whole and the fine work that happens every day."
Rep. Raymond E. Gallison Jr., D-Bristol, is a member of the Special Legislative Commission on Defense Economy Planning. He was told all new NUWC contracts will have to go through NAVSEA before moving forward, he said Monday.
"I know NUWC officials are in D.C. right now meeting with the Navy about this," Gallison said. "It all came about because of that situation that arose (with ASFT).
"It should be interesting to see what comes out of all this. It probably will slow down the (contract) process because everything has to go through NAVSEA now."
Sen. Louis P. DiPalma, D-Middletown, said NUWC's contracting authority was not discussed during a breakfast meeting Monday of the Southeastern New England Defense Industry Association. Rep. David Cicilline, D-R.I., was among those who attended the meeting, which was held at the Mainstay Inn in Newport.
In the hours after the meeting, DiPalma heard news that changes were in the works with NUWC contracts, he said.
"Typically, if you have contract authority, you can award, negotiate and modify contracts," said DiPalma, who also serves on the Defense Economy Planning commission. "Many organizations within the military can do that. It's not unique to NUWC, but from what I'm hearing, it's going to that higher level. Without specifics, it's hard to know the scope, but I can say, it's not a good situation."
Senate President Teresa Paiva Weed, D-Newport, said she spoke with Stokes this morning, but had received no official word about a shift in NUWC Newport's contracting authority.
"These contractors are a vital part of the defense economy and a critical part of our Rhode Island economy," Weed said. "We're working with our congressional delegation, particularly Sen. (Jack) Reed, to ensure any concerns the federal government might have are addressed."
In a March 11 statement, NAVSEA announced that all contracts with ASFT were terminated per order of Secretary of the Navy Ray Mabus. At the time, NAVSEA appointed a special review team to investigate the contract and financial process in the ASFT case. The team also was tasked with comparing what happened with the established process and making recommendations to reduce the risk of fraud in the future.
According to its website, the NUWC Newport division has a sweeping impact on not just Aquidneck Island, but the entire southern New England region and across the country. It provides research and development support for submarines and other underwater warfare systems and had a total funded program of $1.1 billion in 2010.
Besides local operations, NUWC Newport supervises detachments based in West Palm Beach, Fla., and Andros Island in the Bahamas. NUWC Newport also runs remote test plants at Seneca Lake and Fisher's Island in New York, as well as Dodge Pond, Conn.
The website indicated that of $534 million in contracts awarded throughout 2010, more than $361 million was set aside for Rhode Island, Massachusetts and Connecticut private contractors.
NUWC employs more than 2,700 people, about 75 percent of whom are engineers and scientists. Of those, NUWC statistics showed that more than 1,000 of those hold advanced degrees.